ITO Can't Retain Amount Deposited By Taxpayer Without Framing Final Assessment Order During Period Of Stay: Delhi High Court

The Delhi High Court allowed assessee's petition seeking refund of amounts which was deposited towards part payment of demand raised in pursuance of assessment order for AYs 2008-09 and 2009-10.The Division Bench comprising Justice Yashwant Varma and Justice Purushaindra Kumar Kaurav observed that “Since the remit ordered by the ITAT, admittedly, was rendered prior to 1 June 2016, it was incumbent upon the AO to have framed a final order of assessment on or before 31 March 2017. Having failed to do so, there would exist no justification for the respondent to retain the amounts which had been deposited by the petitioner”. (Para 8)The Bench referred to the assessee's submission that the deposits were made as a pre-condition to the grant of stay on demand and interim protection pending conclusion of assessment proceedings. The Bench noted that vide orders for AYs 2008-09 and 2009-10, the Tribunal had remitted issues relating to working capital adjustments against profit margin of comparable to TPO, however, the AO did not frame any final order of assessment. Referring to the relevant provisions of Sec. 153, the Bench opined that the present case is clearly governed by sub-section (7) since the matter relates to an order passed by the authority prior to 01.06.2016. The Tribunal orders were rendered prior to the said date, and thus, it was incumbent upon AO to have framed a final order of assessment on or before 31.03.2017, and having failed to do so, there would exist no justification for Revenue to retain the amounts deposited by assessee, clarified the Bench. The Bench also opined that mere pendency of appeal preferred by assessee against the Tribunal's orders 'would clearly not detract from the right of the writ petitioner to claim refunds since those appeals have in any case been rendered infructuous consequent to the period of limitation of framing an order of assessment itself having come to an end'; Hence, the High Court allowed assessee petition and directed the Revenue to refund the amounts along with the interest as may be statutorily payable. Counsel for Petitioner/ Assessee: Rohit Tiwari, Tanya and ShivaniCounsel for Respondent/ Revenue: Shlok Chandra, Madhavi Shukla, Priya Sarkar and Ujjwal JainCase Title: Navisite India Pvt Ltd vs CITCitation: 2024 LiveLaw (Del) 308Case Number: W.P.(C) 2318/2019Click here to read/ download the Order

ITO Can't Retain Amount Deposited By Taxpayer Without Framing Final Assessment Order During Period Of Stay: Delhi High Court

Pankaj Bajpai

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